Hsbc Holdings Plc · LSE:HSBA

Hsbc — Investor Presentation (June 2018)

32 slides from Hsbc's investor presentation, June 2018

  1. Slide 1: HSBC Strategy Update: Return to Growth and Value Creation

    HSBC Strategy Update: Return to Growth and Value Creation Investor presentation, June 2018

  2. Slide 2: Important notice and forward-looking statements

    HSBC Strategy Update Important notice and forward-looking statements Important notice The information, statements and opinions set out in this presentation and subsequent discussion do not constitute a public offer for the purposes of any applicable law or an offer to sell or solicitation of any off

  3. Slide 3: Summary of the strategy

    HSBC Strategy Update Summary of the strategy Leading international bank with platform for growth and signature balance sheet strength  World’s leading international bank and No 1 global transaction bank  Unparalleled access to high growth markets and coverage of trade corridors between them  Reco

  4. Slide 4: Strategic priorities to deliver growth, improve returns, and enhance experience

    HSBC Strategy Update Strategic priorities to deliver growth, improve returns, and enhance customer and employee experience Strategic priorities Financial targets Accelerate growth from our Asian franchise 1  Build on strength in Hong Kong  Invest in PRD, ASEAN, and Wealth in Asia (incl. Insurance

  5. Slide 5: Agenda

    HSBC Strategy Update Agenda Leading international bank with platform for growth and 1 signature balance sheet strength 2 Next phase of strategy: Return to growth and value creation 3 Profitable growth to deliver RoTE > 11% by 2020 5

  6. Slide 6: Leading international bank with a platform for growth and signature balance sheet strength

    Leading international bank with platform for growth and signature balance sheet strength Leading international bank with a platform for growth and signature balance sheet strength Who we are Strategic differentiators 1 Leading international bank c.38m 67 markets  >50% of Group client revenue connec

  7. Slide 7: Leading international bank with high return transaction banking

    Leading international bank with platform for growth and signature balance sheet strength 1 Leading international bank with high return transaction banking Leading transaction banking Recognised as leading international franchises1 bank Leading market positions FY2017, revenue, USDbn % of large corpo

  8. Slide 8: Unparalleled access to high growth markets

    Leading international bank with platform for growth and signature balance sheet strength 2 Unparalleled access to high growth markets Emerging markets remain drivers of global growth HSBC has access to high growth markets World Nominal GDP growth, 2017-20301 Asia, Market shares2  Largest among inte

  9. Slide 9: Access to domestic growth in eight markets; network to connect trade and capital flows

    Leading international bank with platform for growth and signature balance sheet strength 2 Access to domestic growth in eight markets; network to connect trade and capital flows % of adj. Aspiration Characteristics Markets revenue FY17  Top 5 bank, at least 3-5%  Hong Kong  Malaysia market share

  10. Slide 10: Signature balance sheet strength

    Leading international bank with platform for growth and signature balance sheet strength 3 Signature balance sheet strength Strong balance sheet, FY2017, USD (unless otherwise stated) Low-risk model with stable earnings, 2017 Peer group Customer accounts 1.4tn HSBC average1 2.6x Loans & advances to

  11. Slide 11: Agenda

    HSBC Strategy Update Agenda Leading international bank with platform for growth and signature 1 balance sheet strength 2 Next phase of strategy: Return to growth and value creation 3 Profitable growth to deliver RoTE > 11% by 2020 11

  12. Slide 12: Completing period of transformation; platform for growth

    Strategic priorities Completing period of transformation; platform for growth Transformation since 2011 Next phase of strategy: Return to growth and value creation 1 Accelerate growth from our Asian franchise, and  Divested or exited 110 businesses Insurance and Asset Management in Asia and geograp

  13. Slide 13: Targeting revenue opportunities in high growth areas with returns above cost of equity

    Strategic priorities 1-3 Targeting revenue opportunities in high growth areas with returns well above cost of equity Revenue (reported), USDbn, 2011-2020 Targeting revenue opportunities in high growth areas with returns well above cost of equity Market Size represents targeted revenue growth, CAGR -

  14. Slide 14: Accelerate revenue growth in Asia

    Strategic priorities 1 Accelerate revenue growth in Asia >3bn >1bn >0.2bn Targeted revenue Franchise in Asia (reported, ex BoCom) Opportunities and areas of investment growth by 2020 Revenue, 2017 USDbn USD PBT, 2017 USDbn A Build on strength in Hong Kong Hong Kong  Capture growth in targeted segme

  15. Slide 15: Build on strength in Hong Kong

    Strategic priorities 1A Build on strength in Hong Kong HSBC’s market share has been steady over the years… Opportunities and areas of investment CAGR 2005-17  Grow millennials client base to build Total banking assets in Hong USD0.9tn USD2.9tn 10% customer generation for the future Kong1, USDtn Cap

  16. Slide 16: Develop a leading business in the Pearl River Delta (PRD)

    Strategic priorities 1B Develop a leading business in the Pearl River Delta (PRD) HSBC’s business in PRD has grown steadily Opportunities and areas of investment USDbn  Grow and enhance distribution Revenue >USD1bn network / access to customers  Broaden product offerings and c.0.5 Emerging acceler

  17. Slide 17: Asia expected to be the largest creator of wealth

    Strategic priorities 1C Asia expected to be the largest creator of wealth Rising wealth in Asia Middle class in Asia2 Private financial wealth1, USDtn 2016-21E # of people, bn CAGR 3.5 223 2.5x 1.4 166 2015 2030E 33% 5.6% Average household annual income3 E. Europe 152 L. America USD‘000 MENA 2.3x 32

  18. Slide 18: HSBC is well-positioned to build a leading wealth business in Asia

    Strategic priorities 1C HSBC is well-positioned to build a leading wealth business in Asia >USD1bn >0.4bn >0.1bn Wealth in Asia already a USD5.1bn Targeted revenue business for HSBC today Opportunities and areas of investment growth by 2020 Revenue (reported) in USDbn, Asia, 2017 USD Wealth manageme

  19. Slide 19: UK presents an opportunity for growth after successful completion of ring-fencing

    Strategic priorities 2 UK presents an opportunity for growth after successful completion of ring-fencing >USD1bn >0.4bn >0.1bn Targeted revenue Ring-Fenced Bank setup growth by close to completion Opportunities and areas of investment 2020 USD  HSBC is positioned for  Target mortgage growth (high

  20. Slide 20: Proven ability to grow the business and gain market share; invest for growth

    Strategic priorities 3 Proven ability to grow the business and gain market share; invest for growth from our international network >USD1bn >0.4bn >0.1bn Targeted revenue Investments are delivering Opportunities and areas of investment growth by 2020 2015 2017 Digitise and grow Trade Finance Trade Fi

  21. Slide 21: The US is the single biggest exporter of revenue to the Group

    Strategic priorities 4 The US is the single biggest exporter of revenue to the Group and an important part of HSBC’s proposition as leading international bank US biggest exporter of client revenue to the Group Significant for HSBC’s global franchise Cross-border GB&M and CMB client revenue1, 2017, U

  22. Slide 22: Significant progress to date; targeted organic growth to bring scale to US platform

    Strategic priorities 4 Significant progress to date; targeted organic growth to bring scale to US platform The US has made progress over the past several years… …and our medium-term strategy is built on continued organic growth Adjusted PBT1, USDm RoTE2 > 6%2 1,201 974 737 CML 556 920 0.9%2,3 US Pri

  23. Slide 23: Strong track record in delivering RWA reductions while growing revenue

    Strategic priorities 5 HSBC has a strong track record in delivering RWA reductions while growing revenue; plans to further improve capital efficiencies RWA mix by Global Business Initiatives Group RWAs, USDbn  Embed RoTE in -29% Global Businesses 1,220 and operating entities RoTE  Link incentives

  24. Slide 24: Maintain strong cost discipline, deliver positive jaws and create investment capacity

    Strategic priorities 6 Maintain strong cost discipline, deliver positive jaws and create capacity for increased investment Create investment capacity and deliver overall positive adjusted jaws on a full year basis Adjusted basis, USDbn Investments of USD15-17bn (2018-2020) Mid single digit  Ability

  25. Slide 25: Investing in growth and technology; managed through robust investment framework

    Strategic priorities 7 Investing in growth and technology; managed through robust investment framework Investment Share of categories Description Investment criteria Examples of specific initiatives investment  Investments to grow, improve  Positive Return on  Investments across Global Businesses

  26. Slide 26: Simplify the organisation and invest in future skills

    Strategic priorities 8 Simplify the organisation and invest in future skills Reducing organisational Simplifying processes Investing in training complexity  Improving end-to-end and development  Simplifying the processes, e.g.  Establishing HSBC organisation - Client onboarding from 65 days Unive

  27. Slide 27: Deliverables for strategic priorities by 2020

    Strategic priorities Deliverables for strategic priorities by 2020; continue to provide regular progress updates Strategic priorities Targeted outcome by 2020 Accelerate growth from our Asian franchise  High single digit revenue growth p.a. from Asian 1  Build on strength in Hong Kong franchise 

  28. Slide 28: Agenda

    HSBC Strategy Update Agenda Leading international bank with platform for growth and signature 1 balance sheet strength 2 Next phase of strategy: Return to growth and value creation 3 Profitable growth to deliver RoTE > 11% by 2020 28

  29. Slide 29: Path to achieve >11% RoTE by 2020

    Profitable growth to deliver RoTE > 11% by 2020 Path to achieve >11% RoTE by 2020 Reported RoTE walk1 % Revenue growth supported by increasing capital and cost efficiency  Investing USD15-17bn >11 primarily in growth and technology  Delivering positive adjusted jaws 8.7  Increasing capital effici

  30. Slide 30: Strong capital base to support future growth and shareholder distribution

    Profitable growth to deliver RoTE > 11% by 2020 Strong capital base to support future growth and shareholder distribution Strong capital base to support Group capital ratio above 14% over period of strategic plan1 growth and returns to shareholders Local CET1 ratio at legal 12-13% Support asset grow

  31. Slide 31: Conclusion

    HSBC Strategy Update Conclusion  HSBC is the leading international bank with unparalleled access to the highest growth markets  After a period of restructuring, supported by normalising interest rates and synchronised economic growth, it is time for HSBC to get back into growth mode - Accelerate g

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